Course Project: Master Budget Milo-Freeze Company Description This course contains a Course Project, where you will be required to submit the final completed project at the end of Week 7. Using the budgeting assumptions provided for Milo-Freeze Company, you will prepare a sales budget, a production budget, a direct materials budget and a schedule of expected cash payments for purchases of materials. An Excel template will be provided and required to use to complete and submit Budgeting Assumptions Milo-Freeze Company manufactures and sells a product that has seasonal variations in demand, with peak sales coming in the third quarter. The following information concerns operations for Year 2- the coming year- and for the first two quarters of Year 3: a) The company's single product sells for $10 per unit. Budgeted sales in units for the next six quarters are as follows: Year 2 Quarter 2 3 60,000 100.000 Year 3 Quarter 1 2 70,000 80,000 Budgeted unit sales 4 50,000 40,000 b) Sales are collected in the following pattern: 75% in the quarter the sales are made, and the remaining 25% in the following quarter. On January 1, Year 2, the company's balance sheet showed $65,000 in accounts receivable, all of which will be collected by the end of first quarter. Bad debts are negligible and can be ignored. c) The company desires an ending inventory of finished units on hand at the end of each quarter equal to 30% of the budgeted sales for the next quarter. On December 31, Year 1, the company had 12,000 units on hand d) Six pounds of raw materials are required to complete one unit of product. The company requires an ending inventory of raw materials on hand at the end of each quarter equal to 10% of the production needs of the following quarter. On December 31, Year 1, the company had 23,000 pounds of raw materials on hand. e) The raw material costs $0.80 per pound. Purchases of raw material are paid for in the following pattern: 60% paid in the quarter the purchases are made, and the remaining 40% paid in the following quarter. On January 1, Year 2, the company's balance sheet showed $81,500 in accounts payable for raw material purchases, all of which will be paid for in the first quarter of the year. Overall Requirements Prepare the following budgets and schedules for the year, showing both quarterly and total figures: 1. A sales budget. 2. A cash collections budget. 3. A production budget. 4. A direct materials budget. 5. Cash payments for purchases of materials schedule. Milo-Freeze Company Sales Budget For the year Year 2 Quarter 2 3 Year 2 Budgeted unit sales Selling price per unit Total Sales HA HA Percentage of sales collected in the period of the sale Percentage of sales collected in the period after the sale 0% 0% Milo-Freeze Company Cash Collections Budget For the year Percentage of sales collected in the period of the sale Percentage of sales collected in the period after the sale 0% 0% Year 2 Quarter 2 3 1 4 Year 2 $ $ GA Accounts receivable, beginning Balance First quarter sales Second quarter sales Third quarter sales Fourth quarter sales Total cash collections $ $ Milo-Freeze Company Production Budget For the Year Assumption 0% Desired Ending Inventory Starting inventory first quarter Desired Ending Inventory 4th qtr Year 3 Quarter Year 2 Quarter 2 1 4 Year 2 1 - - Budgeted Sales Add Desired ending inventory of finished goods Total Needs Less beginning inventory of finished goods Required production Milo-Freeze Company Direct Materials Budget For the Year (In Units) Year 2 Quarter Year 3 Quarter 4 Year 2 Assumption 0% Desired ending inventory RM 0 Pounds of Material per unit o Cost per unit $0 Beginning AP Beginning RM Desired ending inventory for 4th quarter Required production in units of finished goods (from production rep Units of raw materials needed per unit of finished goods Production needs (units) Add Desired units of ending inventory of raw materials Totalunits of raw materials needed Less units of beginning inventories of raw materials Units of raw materials to be purchased Unit cost of raw materials Cost of raw materials to be purchased Percentage of purchases paid for in the period of the purchase Percentage of purchases paid for in the period after the purchase 0% 0% Milo-Freeze Company Expected Cash Payments Schedule For the Year (In Units) 0% Percentage of purchases paid for in the period of the purchase Percentage of purchases paid for in the period after the purchase 0% Schedule of expected cash distribution for materials Year 2 Quarter 2 1 4 Year 2 $ $ $ Accounts payable, beginning Balance First quarter purchases Second quarter sales Third quarter sales Fourth quarter sales Total cash disbursements for materials $ $ HA